Trump Demands a Payroll Tax Cut: Report

By Yuval Rosenberg

Pelosi Says $1.3 Trillion ‘Not Enough’ for Next Coronavirus
Relief Bill

House Speaker Nancy Pelosi said Thursday that the
next coronavirus relief bill, which is expected to include some
kind of extension of the $600 per week unemployment supplement,
would cost at least $1.3 trillion — but that amount is “not
enough.” In an interview on Bloomberg Television, Pelosi said she
was confident Republicans would “come around” to make a deal in the
coming weeks, with the final package totaling close to the $3
trillion proposed by House Democrats.

White House says stimulus must include payroll tax cut:
So the two sides are potentially trillions of dollars apart, and
the prospects for reaching any deal may be further complicated by
White House insistence that any package include a payroll tax cut.
“As he has done since the beginning of this pandemic, President
Trump wants to provide relief to hardworking Americans who have
been impacted by this virus and one way of doing that is with a
payroll tax holiday,” White House spokesman Judd Deere said in a
statement cited by
The Washington Post. “He’s called on Congress to
pass this before and he believes it must be part of any phase four
package.”

Lawmakers, including key Republicans, have been cool to the
idea, which Trump and administration officials have been pushing
for months. A spokesperson for Sen. Chuck Grassley, the Republican
chair of Senate Finance Committee, said, “Chairman Grassley looks
forward to working with the Administration and his fellow lawmakers
on the next coronavirus bill. A number of tax relief proposals will
be part of the discussion.” That’s not exactly a wholehearted
endorsement of a payroll tax cut.

Emergency unemployment aid expires soon: The $600 per
week boost in unemployment benefits — which has helped keep
millions of Americans afloat since payments began in April —
expires in most states on July 25, and it looks increasingly likely
that Congress will allow the program to lapse or end, even as
lawmakers negotiate a potential extension. The failure to pass an
extension before July 25 means there could be a period of at least
several weeks with no additional unemployment payments, which could
be disastrous financially for the millions of unemployed workers in
the U.S., as well as for the economy as a whole. (For more details
on how this could play out, see
this CNBC piece.)

The Trump administration said earlier this week that it was open
to a limited extension at a lower payment level, possibly between
$200 and $400 per week. Pelosi on Wednesday signaled that she is
willing to negotiate with Republicans on the size of the
supplemental payment, though any agreement would depend on how much
money is provided in the form of direct assistance to individuals
as part of the next stimulus package.

Senate Majority Leader Mitch McConnell (R-KY), however, sounded
less interest in extending the extra unemployment payments, saying
Tuesday that the “bonus” had been a “mistake.” Many Republicans
believe the higher unemployment payments are motivating workers to
avoid going back to their jobs, depressing the recovery. Many
Democrats, however, argue that there simply isn’t enough work
available for the more than 30 million people currently receiving
unemployment assistance, and that the supplements are needed to
prevent the economy from sliding backwards.

Many other obstacles: Pelosi reportedly wants to include
another direct payment to individuals in the bill, and McConnell
has said he’s open to the idea, though it’s likely that any
payments will be more strictly limited by income. Both leaders also
say they want to see aid for schools in the package, and
Republicans reportedly are looking at
tying aid to schools reopening.

Those and numerous other issues will be difficult to negotiate.
Democrats want to include housing assistance for renters and
homeowners, but Republicans are opposed. Pelosi wants to provide
substantial aid — as much as $1 trillion — to state and local
governments, but McConnell and the White House have resisted the
idea, expressing concerns about ‘bailing out’ governments that have
run large deficits. Democrats also want more food aid and tougher
workplace safety rules, but Republicans have resisted, while
maintaining that doctors and businesses need more liability
protection from lawsuits over potential coronavirus-related
illnesses and deaths.

Negotiations expected to start next week.
Congress returns to town from its Fourth of July break on
Monday and negotiations over the relief bill are expected to begin
next week. But it looks like there’s a good chance it may be too
late to extend the enhanced unemployment payments without
disruption.

Schumer, Democrats Propose $350 Billion in Aid for Minority
Communities

Minority Leader Chuck Schumer and 14 Senate Democrats on
Thursday proposed to invest $350 billion in communities of color,
which have been hit disproportionately by the coronavirus pandemic,
as part of the next aid package.

The
proposal would provide $135 billion for child
care, mental health, primary care and job training and $215 billion
for infrastructure including high-speed internet; tax credits for
homeowners and renters; and Medicaid expansion. The proposal would
be partially paid for by re-programming $200 billion of unspent
funds provided by the CARES Act passed in March.

"Long before the pandemic, long before this recession, long
before this year’s protests, structural inequalities have persisted
in health care and housing, the economy and education,”
Schumer said in a statement. “Covid-19 has only
magnified these injustices and we must confront them with lasting,
meaningful solutions that tear down economic and social barriers,
and reinvest in historically underserved communities. The Economic
Justice Act is a needed step in a long journey to address
systematic racism and historic underinvestment in communities of
color."

Quote of the Day

“Never before in our history has Congress spent so much money
so quickly as we have in response to COVID-19. Unprecedented
spending, while necessary, creates an unprecedented opportunity for
funds to be misused and other forms of mischief. Although the
Administration has taken limited steps to increase transparency and
accountability, it is incumbent upon Congress to further strengthen
oversight.”

– 17 Blue Dog Democrats in a
letter to congressional leaders asking that Congress
“protect taxpayer dollars” by passing legislation to stop improper
coronavirus payments to dead people, strengthen inspectors general,
require more information from federal agencies and have the Federal
Reserve record and release details of meetings pertaining to
pandemic response. Read more at
The Hill.

FreedomWorks President: ‘No New Spending as Part of Coronavirus
Relief Bills’

Adam Brandon, president of
FreedomWorks, the conservative and libertarian
advocacy group, says that the federal government can’t afford to
spend any more on coronavirus relief. In an opinion piece at

The Hill, Brandon argues that while another
coronavirus aid package may be inevitable, it shouldn’t extend the
$600 in enhanced weekly unemployment benefits set to expire this
month.

Economists warn that cutting off those benefits could
sharply reduce incomes for some 30 million Americans, which could
reverberate across the economy. A
new study released Thursday by JPMorgan Chase
found that unemployed households actually increased their
spending once they began receiving benefits. "The fact that
spending by benefit recipients rose during the pandemic instead of
falling, like in normal times, suggests that the $600 supplement
has helped households," the report says.

But Brandon argues that extending the benefit would hurt
businesses:

“Not only would extending these benefits drive up the
deficit, which already exceeds $2.744 trillion this year and is
expected to continue to rise, but it would also deal a serious blow
to small businesses who may need workers as they struggle to pick
up the pieces from the economic shutdowns that sent the economy in
a tailspin.
“Paying workers more to stay home than to return to work
is a surefire way to cause thousands of small businesses -- a
cornerstone of the economy across the country -- to go
under.”

What’s more, he says, extending the federal unemployment
benefit may be “a stepping stone on the path to
universal basic income.” A better idea, he suggests, would be to
cut payroll taxes, as President Trump is reportedly demanding.
“Businesses deserve the support they need to safely and responsibly
reopen,” he writes. “This starts with no new spending as part of
coronavirus relief bills.”

Jobless Claims Top 1 Million for 17th Week in a Row

Another 1.3 million Americans filed initial claims for
state unemployment benefits last week, the Labor Department
said
Thursday. New applications fell for the 16th straight week, but the
size of the decrease fell short of expectations, with just 10,000
fewer filings than the week before. It was the 17th straight week
in which initial claims exceeded 1 million.

In addition to the claims through the state systems,
more than 900,000 people applied for benefits through the federal
Pandemic Unemployment Assistance program, which provides assistance
to self-employed and gig workers who are usually ineligible for
unemployment aid.

In all, about 2.2 million people applied for unemployment
benefits in the week ending July 11. (Using data that is not
seasonally adjusted, the number is
2.4 million).

“The level of jobless claims is stalling -- and that's a very
worrying sign,”
said Heather Long of the Washington Post.

Chart of the Day: The Cost of Covid-19
Hospitalizations

The median charge for hospitalization of a Covid-19
patient ranged from $34,662 for those between the ages of 23 and 30
to $45,683 for the 51-60 age group, according to a new analysis of
commercial claims by not-for-profit research firm
Fair Health. (h/t
Modern Healthcare and Morning
Consult)

The Case of the Disappearing Covid Data

A sudden change by the Trump administration in how coronavirus
data is reported is
raising concerns among political leaders, public
health experts and state and hospital officials that it could lead
to increased burdens on already strained facilities and reduce
transparency about the state of the pandemic.

“To have the CDC not be able to distribute publicly the number
of hospitalizations and the number of deaths is going to hurt us in
our bid to end this crisis,” Senate Minority Leader Chuck Schumer
said oin a
statement. “Because when you don't know the truth,
and you don't go after the truth, inevitably, you lose out.”

Health care watchers
noted Wednesday that previously public data like a
dashboard tracking hospital capacity were no longer available on
the Centers for Disease Control and Prevention website.

The change came after the Trump administration transferred
control of the information to the Department of Health and Human
Services. The CDC reportedly restored the site’s previous
dashboards later in the day, with data through Tuesday and a note
saying: “This file will not be updated after July 14, 2020 and
includes data from April 1 to July 14.”

HHS spokesman Michael Caputo
told CNBC the CDC was directed to make the data
available again. “Yes, HHS is committed to being transparent with
the American public about the information it is collecting on the
coronavirus,” he said. “Therefore, HHS has directed CDC to
re-establish the coronavirus dashboards it withdrew from the public
on Wednesday.”

Some experts expressed concerns that the change could lead to
the data being politicized, or could hamper tracking of the
pandemic.

Dr. Jennifer Nuzzo, an epidemiologist at Johns Hopkins
University, told CNBC she was concerned that the administration
didn’t appear to have detailed planning for the sudden transition
in data reporting from the CDC to HHS and didn’t give hospitals or
researchers a warning about the change.

“The question is, what are we going to lose in this
transition, and in particular at a moment where we really don’t
want to lose any ability to understand what’s happening in
hospitals,” she said. “I think it’s reasonable to worry that it
could lead to erosion of capacities at a moment where we very much
can’t afford to lose any abilities.”

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